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June 2, 2010 Newsletter Archive

A Matter of Trust: Wishes Subverted
The Story of the Barnes Foundation

Photo courtesy of http://www.cosmopolis.ch/english/cosmo13/barnes.htm

Does exquisite art belong to the collector in perpetuity? Is such art for all of humanity to behold, or for the art owner to do with as he or she pleases? And when, if ever, should a trust be busted? These are just some of the compelling themes we pondered after watching the recently released film, The Art of the Steal.

Filmmaker, Don Argott, provides us with plenty to consider in this documentary about Dr. Albert Barnes and the Barnes Foundation located in Lower Merion, Pennsylvania. Upon making his fortune in pharmaceuticals in the early 1900's, Dr. Barnes began collecting art, eventually amassing the most impressive collection of post-impressionist art in the world.

The documentary reveals Dr. Barnes' clashes with Philadelphia society and the art establishment of the day. As a result of this enmity, and to address his concern about the legacy of his art collection, Barnes executed a trust which provided for the creation of the Barnes Foundation. The Foundation was charged with holding and maintaining Barnes' art collection, with the very specific direction that none of it could be sold, loaned or moved. In large part his collection was to be held for the benefit of the art school he had created and included very limited public access. As you might imagine the local, and for that matter the world, art community was very dismayed that this very significant art collection was essentially off limits.

Whether driven by some altruistic sense of serving the greater good, or by political power, prestige or greed, the legal maneuvers of some highly regarded non-profits, wealthy individuals, and politicians succeeded over time in eroding Albert Barnes' wishes. The result is that in 2012 the Barnes' art collection will be moved from the Foundation's location in Merion to downtown Philadelphia, about five miles away.

What is certain to be debated for years and perhaps decades to come are the questions of intent. Were the individuals involved in eroding Barnes' trust doing it to make the art more available to the general public, or was the move, as the one individual in the film describes, "a modern day corporate takeover of a nonprofit?"

In a recent Weekly Standard article entitled No Museum Left Behind, Lance Esplund stated that the Philadelphia art establishment's intentions undoubtedly fell into the latter camp maintaining that, "As early as the 1930s, Barnes warned about individuals who supposedly are on the side of art but who 'mistake the husk for the kernel, the shadow for the substance.' Unfortunately, these are increasingly the people in charge of our museums. Barnes gave life to a unique institution, and its present-day stewards should be obligated to follow the ethical oath of others (medical doctors and art conservators among them) entrusted with the care of the living: First, do no harm. The relocation of the Barnes is disguised as altruism, but it is fueled solely by ignorance and avarice."

So here we have the wishes and desires of a man, who had taken the appropriate step of drawing up a document to evidence his wishes and those directions and intentions were thwarted. Does that mean making an estate plan is of no benefit? Far from it! We feel that this story highlights the critically important need to be reflective in our planning and anticipate the unanticipated as much as possible, in particular by making the structure of trust and other estate planning instruments flexible enough to adjust to changing circumstances.

The Barnes Foundation went awry, in part, due to the financial challenge of maintaining the physical building holding extremely valuable art in a small rural residential community. Had Dr. Barnes been more focused on the financial demands of maintaining that property and the collection, his true wishes might still be controlling the situation.

As estate planning attorneys we seek to bring our experience and knowledge to help people avoid problems with their estates. The story of the Barnes Foundation illustrates that little is guaranteed in this world, and that sometimes our best intentions fall apart. Nevertheless, some problems can be avoided with thoughtful and careful reflection.

Ten Reasons to Review or Update Your Estate Plan Now

You may not think that having an estate plan is necessary because you are too young or don't have enough assets. And even if you do have an estate plan, you may not think you need to update it or have it reviewed.

However, as the following list from an ElderLawAnswers.com article illustrates, estate planning is for everyone, regardless of age or net worth. Updating your estate plan is essential because of the many personal and financial changes you experience over time.

Loss of Capacity. What if you become incapacitated and unable to manage your own affairs? Without a plan, a court will select a person to manage your affairs through often costly guardianship/conservatorship proceedings. With a plan, you can use a power of attorney to select that person.

Minor Children. Who will raise your minor children in the event of your death? Without a plan, a court will make the decision. With a plan, you are able to nominate the guardian of your minor children.

Dying Without a Will. Who will inherit your assets upon your death? Without a plan, your assets will pass to your heirs according to state intestate laws. Your family members (perhaps ones that you would not choose) will receive your assets without the benefit of your direction or of trust protection. With a plan, you decide who gets your assets.

Blended Families. What if your family is the result of multiple marriages? Without a plan, children from different marriages may not be treated as you would want. With a plan, you determine what goes to your current spouse and to the children from a prior marriage.

Children with Special Needs. Without a plan, a child with special needs risks being disqualified from receiving Medicaid or SSI benefits and may have to use his or her inheritance to pay for care. With a plan, you can establish a special needs trust that will allow the child to remain eligible for government benefits while using the trust assets to pay for non-covered expenses.

Keeping Assets in the Family. Would you prefer that your assets remain in your own family? Without a plan, your child's spouse may wind up with your money if your child dies prematurely. If your child divorces his or her current spouse, many of your assets could go to that spouse. With a plan, you can set up a trust that ensures that your assets will stay in your family and pass to your grandchildren.

Financial Security. Will your spouse and children be able to survive financially? Without a plan, and the income replacement provided by life insurance, your family may be unable to maintain its current standard of living. With a plan, life insurance can mean that your family will enjoy financial security.

Retirement Accounts. Do you have an IRA or similar retirement account? Without a plan, the designated beneficiary of your retirement account funds may not reflect your current wishes and may result in burdensome tax consequences for your heirs. With a plan, you can choose the "best" beneficiary.

Business Ownership. Do you own a business? Without a plan, you don't name a successor, thus risking that your family could lose control of the business. With a plan, you choose who will own and control the business after you are gone.

Avoiding Probate. Without a plan, your estate may be subject to delays and excess fees (depending upon your state), and your assets will be a matter of public record. With a plan, you can structure your affairs so that probate may be avoided entirely.

We can assist you with your estate and life care planning. Call us for an appointment today.

Event

Today at 11:15 a.m. EDT, President Obama and Kathleen Sebelius, Secretary of Health and Human Services, will host a "tele-town hall" event with older adults in Wheaton, MD.

The purpose of the event is to answer questions from older adults in person and by phone about how the Affordable Care Act will affect Medicare. The National Academy of Elder Law Attorneys is co-sponsoring the event along with other national organizations which represent older adults.

Individuals interested in viewing the town hall may do so through the White House website. The town hall will also likely be broadcast on C-SPAN.

Individuals interested in asking a question of President Obama or Secretary Sebelius can call in during Tuesday's town hall at 1-800-837-1935, pass code: 80272058.